Stellantis stock jumps despite $26.3B loss as improving second-half results signal turnaround beginning

Core Viewpoint - Stellantis reported a significant full-year loss of 22.3 billion euros ($26.3 billion) primarily due to a $26 billion EV-related charge, but showed signs of improvement in the second half of the year, indicating a potential turnaround under CEO Antonio Filosa [1][4]. Financial Performance - In the second half, Stellantis achieved net revenue of 79.25 billion euros ($93.47 billion), which is within the forecast range of 78 billion to 80 billion euros ($91.87 to $94.23 billion) and represents a 10% increase from 71.86 billion euros ($84.64 billion) reported a year ago [2]. - The company reported a second-half adjusted operating income (AOI) loss of 1.38 billion euros ($1.63 billion), aligning with the forecast range of 1.2 billion to 1.5 billion euros ($1.41 billion to $1.77 billion), contrasting sharply with a profit of 10.2 billion euros ($12 billion) in 2023 [3]. Operational Metrics - Global shipments improved by 11% in the second half, totaling 277,000 units, with all regions reporting higher volumes [4]. - The company anticipates mid-single-digit growth in net revenues for 2026, with a low-single-digit adjusted AOI margin [5]. Strategic Insights - CEO Antonio Filosa indicated that the substantial charges were due to overestimating the pace of the energy transition and the need to realign the business with customer preferences for electric, hybrid, and internal combustion technologies [5][8]. - Stellantis plans to return to positive industrial free cash flow by 2027, despite estimating a net tariff expense of 1.6 billion euros ($1.9 billion) for the year, which will impact AOI [5]. Future Outlook - The company disclosed that cash payments of 6.5 billion euros ($7.7 billion) will be made over the next four years, with additional charges of 14.7 billion euros ($17.34 billion) expected to affect the 2025 second-half results, although these will not impact adjusted operating income [7].